The Dawn of EV, page-492

Binding Take or Pay Offtake Terms Finalised with OM Holdings Limited Subsidiary

Element 25 Limited (E25 or Company) (ASX:E25) is pleased to advise that binding ,take or pay offtake agreements have been finalised with OM Materials (S) Pte Ltd (OMS), a wholly owned subsidiary of ASX listed company OM Holdings Limited (ASX:OMH) (OMH).

The agreement covers 100% of the manganese ore produced from the first stage (Stage 1) of the Butcherbird Project (Project) over an initial five year term, with
a conditional provision to extend this for a further five years.

The key terms of the definitive agreements include the following:

• OMS to take 100% of the manganese ore from the Project from Stage 1.

• An ore pricing mechanism which is calculated as a discount against the Fast

  Markets published 44% Mn benchmark price (adjusted for FOB delivery terms).

• The parties have agreed the specification and pricing formula(e) for delivered ore

  between a manganese grade of 28%-35%.

• The parties have agreed on minimum and maximum levels/ratios of certain

  impurities including iron, silica, phosphorous and moisture. Certain pricing adjustments are provided for in the agreement including both discounts and premia, the details of which are commercial in confidence.

• The term of the Offtake Agreement will be 5 years, with provision for an extension subject to satisfactory performance by OMS measured against agreed KPI’s.

• Trade terms will include a provision in the first twenty-four months for payment to be made on delivery of parcel sizes as small as 1,000 tonne to Port Hedland, significantly reducing E25’s working capital requirements.

• The ore will be delivered on an FOB basis.

• The Offtake Agreement includes conditions precedent in relation to board approvals, and the receipt

ASX ANNOUNCEMENT 28 January 2021

of all necessary regulatory approvals for Stage 1 production.